Entering September, USD/JPY changed sharply and reached the ¥152 range for the first time in about six months. The market is closely watching the direction of monetary policy in Japan and the United States, as well as developments at the Bank of Japan meeting.
Market conditions for USD/JPY changed in September, with the pair shifting sharply toward yen appreciation and reaching the upper ¥152 range for the first time in about six months. As concerns over an acceleration in the Bank of Japan’s rate-hike pace intensified and yen-selling positions were unwound, the market also began focusing on the battle around the ¥150 level.
The move reflected policy expectations in both Japan and the United States. Reports said that Treasury Secretary Scott Bessent had pointed out that yen depreciation was intensifying inflationary pressure and that market participants were expecting Japan to take decisive action. In addition, a speech by Bank of Japan Policy Board member Takada Hajime (高田創) suggested a flexible response, further heightening concerns over yen appreciation.
Comments from U.S. Federal Reserve officials also affected USD/JPY. While more dovish views gained ground, expectations of U.S. rate hikes resurfaced after the release of U.S. employment-related data. In the U.S. employment report released on the 4th, nonfarm payroll growth and wage growth exceeded expectations, supporting a move toward a stronger dollar and a weaker yen.
USD/JPY was also seen rising to around the ¥156 level toward the end of the week, but after fluctuating over a range of about ¥21, it is expected to change from yen appreciation back to yen depreciation depending on the closely watched Bank of Japan meeting on the 17th and 18th. The pair could become active again depending on monetary policy in Japan and the United States.